U.S. stocks jumped for a second day on January 31, as investors snapped up some of the tech shares that have been battered all month.
In spite of the two-day relief rally, the S&P 500 and the Nasdaq Composite posted their worst months since the onset of the pandemic. They suffered losses as investors braced for the Federal Reserve to raise interest rates multiple times this year.
The S&P 500 jumped 1.89% to 4,515.55, closing out the month down 5.3%, its worst month since March 2020. The Dow Jones Industrial Average gained 406.39 points or 1.2% to reach 35,131.86 on the last day of the month. That helped the Dow Jones Industrial Average cut its monthly loss to 3.3%, as it benefited from its underweighting in tech shares.
On January 31, the Nasdaq Composite advanced 3.41% to 14,239.88, adding to its comeback on Friday. The Nasdaq Composite still ended down 8.9% for January, its worst month in a long time.
U.S. stocks and investors
As mentioned earlier, U.S. stocks suffered serious losses in January.
Investors are closely monitoring the Federal Reserve’s decisions. Several days ago, the central bank indicated that it would likely start raising rates in March. It wants to tackle historically high inflation. That would be the Federal Reserve’s first rate hike in several years.
Tech shares were the hardest hit in the first month of 2022, as investors feared higher rates would expose their lofty valuations and raise their operating costs.
In January, Tesla, which fell 11%, added more than 10% on Monday after Credit Suisse upgraded its stock. Credit Suisse said the company had been unfairly caught up in the market decline. Apart from Tesla, other EV makers rose too, with Rivian and Lucid adding more than 15% and 8%, respectively.
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